Business Observations: September 5, 2008 Edition

Standard disclaimer: don’t take from my selections, ordering, headlines, etc. any indications of the interests or plans of my employer (if you do, you’ll undoubtedly be disappointed when they don’t play out.)

I’ll blame the Olympics plus the arrival of our Wii Fit and preparation for a couple of classes I’m going to be teaching…  For whatever reasons, it’s been a really long time since I’ve dug into the ever growing list of business observations I’ve been collecting – and it’s huge.  How could I ever wrestle this monster to the ground?

Let me try tackling it a topic at a time…

The App Store Battle

In March, Steve Jobs announced the iPhone App Store.  It launched in July.  Apparently, before then, no one knew we needed such a beast (okay, some of us have been harping on the need for something better than the traditional carrier deck for awhile now…), but suddenly everyone is rushing to bring a better one to market.

First up were the rumors that T-Mobile was working on an App Store-like replacement for the traditional deck.  Tricia Duryee of reported “Starting this fall, T-Mobile USA will take the extraordinary step of ditching its traditional deck on the phone and replacing it with a platform that’s open to almost any developer, multiple sources have told us. Think of *Apple’s* App store, but for the entire carrier’s handset line-up from smartphone to feature phone.” Paul Glazowski at Mashable says “Good Luck.” He clarifies “I’m curious to see how T-Mobile is able to grapple with three fairly major inconveniences: its non-global presence, its inferior network, and the inevitable mess that comes with providing tangential support for phone software compatibility issues.”

Next up on the app store runway was Google with its Android Market. Kevin Donovan at Techdirt commented on Apple’s tight fisted control of the App Store “If developers worry that their applications will be shut down by an overzealous enforcement organization (there is no evidence Apple is pulling applications after anything more than a third-party complaint), then innovation will stagnate.” He uses that observation to explain the relevance of Google’s announcement: “Google seems to understand this. In announcing their competing service, the Android Market, the Android team notes ‘We chose the term ‘market’ rather than ‘store’ because we feel that developers should have an open and unobstructed environment to make their content available.'”

Not to be left too far behind, Microsoft, apparently, has started hiring to build a team for their own app store concept for Windows Mobile devices. Darren Murph at Engadget reports that “said platform will be christened Skymarket. Described as a ‘marketplace service for Windows Mobile,’ Skymarket could seemingly be a critical part of WinMo 7. ” Russell Buckley at MobHappy observes that “Actually, considering Redmond’s experience in the PC environment and the fact they’ve been doing Windows Mobile for 8 years now, it’s quite surprising that they hadn’t done this before.”

Russell goes on to point out that, in one form or another, Apple wasn’t the first, pointing specifically to GetJar: “And then there’s the dark horse in the race with GetJar, which is the incredibly popular independent download site for the mobile geek community… they’ve had 300 million downloads since 2004 and are averaging out at 13 million a month. OK, unlike some other players in the market, GetJar’s downloads are free, but these are still big numbers, albeit tiny in comparison to the mobile web. Expect some of those new carrier portals to be powered by GetJar, according to MocoNews.” He then uses that lead in as an opportunity to reopen the debate of native (downloaded) app vs. web-based app development.

Which is a good lead in to our next topic…

Application Development Environments

Andreas Constantinou sums it up pretty well at VisionMobile: “But the array of software platforms for mobile phones keeps growing.. and gets more and more entangled by the month, as new platforms surface.” He then provides a slideshow about “Application Environments (AEs), the software layer which enables developers to develop, deploy and execute their applications on a mobile phone.”

Ofir Leitner at Next Generation Mobile Content advises developers: “… don’t get me wrong, I believe that iPhone and Android are both great and promising platforms that open new possibilities for mobile developers, and we can already see its effects on the platforms market. There’s nothing like a competitor ‘breathing on your neck’ to get you finally going faster… But: Don’t focus all your energy there. Pay attention to the platforms that are currently in the hands of your users, and that in spite of how things look like now, will probably stay there, at least enough to make you get used to them… ”

Nokia obviously is the global market leader and is increasingly in the software business. So, when Forbes (reporting on similar bias at a Silicon Valley event) ran a very unfavorable article called “Nokia’s Software Problem” it immediately got a reaction. In it, they quoted Michael Arrington saying “I believe that Nokia and Symbian [the software that powers its smart phones] are irrelevant companies at this point,” and Loopt’s Sam Altman saying “You can trick yourself into believing the iPhone is not such a big deal if you say there are only 7 million in the world, but you would be completely wrong, because you’ve got to take into account the engagement levels.”

Obviously, this earned a strong response from more globally-minded commentators. Gábor Török at Mobile thoughts sums it up in his post “Silicon Valley doesn’t respect Nokia.”

And as this iPhone backlash started to gain steam, Tarek at created a list of all the things he missed about Nokia’s S60 interface while using the iPhone: “After finally getting my thoughts on the iPhone 3G out into a blog post last week I felt it was finally time to go back to using a Nokia S60 device again. I’d really missed the S60 experience and I’ve wanted to try some of the new devices running the latest software … That got me thinking about what I really missed about the S60 experience while I was using the iPhone and here is what I came up with…” (click thru to read his list).

Apple Backlash

Paul Golding (love the new site design) made a number of meaningful observations about the iPhone ecosystem to bring some of the hype back down to earth in a post actually titled “Do androids dream of killer apps?”: “In a recent survey of Micro-ISVs, the mode (i.e. most common) revenue figure was…? … Exactly zero. … Having been involved with various software ventures in Web and mobile, I already knew the answer. Most of us do. Often times, the problem is the market, or lack of presence in one. … So, we will expect to see thousands of iPhone apps (there already are) and thousands of Android apps, most of which will go nowhere. But we continue to dream of the killer app. … There is no killer iPhone app. The ‘iPhone ecosystem’ is the killer. The device, the early adopters (and now hoards of smart followers), the flat-rate tariff, the apps store, the Apple marketing machine, the SDK, the … well, the list continues to grow. (Soon the prepay iPhone.) I’ve talked about the importance of ecosystems (I call it the ‘Mobilisation factory’) endlessly in various workshops and yet it largely gets ignored. It always comes back to that same issue – what business are we in? Parker pens thought they were in the pen business. When it was pointed out that they were actually in the gift business, things turned around.”

Apple’s closedness and censorship was also a topic of debate. Techdirt’s Mike Masnick summarized a couple of examples “Apple taking down popular games from its App store, … Apple denying a comic book reader entrance to its iPhone app store because the primary comic book being offered was too violent” as lead in to his real question: “Still, it does make you wonder why Apple is bothering? All it seems to do is piss off people. It takes extra work and effort on Apple’s part and it’s hard to see who benefits. … Having Apple set itself up as the ultimate gatekeeper isn’t ‘censorship’ — it’s just pointless.”


Completely switching gears… Femtocell technology has been a hot topic over the past few weeks.

Alan Quayle provided “An Independent Review of Femtocell Technology” He summarizes his findings with this paragraph: “Femtocell enables mobile broadband traffic to be off-loaded in the home and office, this is an important benefit for the operator not the customer. Operational and commercial issues need to be resolved, as described above. But once solved, and its operation is transparent to the customer, we will likely see femtocell bundled in all converged operator broadband modems. The main challenge facing femocell technology is the timing of when the operational and commercial issues can be solved to meet the conditions necessary for market success not technology trial success.”

Teresa von Fuchs, at MobileCrunch made these observations: “While so far most fixed-to-mobile solutions have been UMA-based, such as T-Mobile’s Hotspot@Home service in the U.S. and similar services offered by Orange in France, Spain and the United Kingdom, Sprint’s new femtocell-based Airave solution could create competition in the convergence market.” She quoted ABI’s Stuart Carlaw: “We expect cellular-based femtocells to have taken over the baton from UMA- and SiP-based Wi-Fi solutions by 2013, seizing 62% of the market.”

Unstrung’s Michelle Donegan went so far as to declare “2010: Year of the Femto.” Reading from a recent Heavy Reading report, Michelle reported “Among the 111 responses from the 79 operators surveyed, 54 percent said that they planned to launch services between the second half of 2009 and the end of 2010, and 33 percent said their commercial femtocell launches were scheduled for 2011 or later. Those timescales show just how much operators have yet to iron out in their femto strategies, from the business case to technical issues like interference management, standardization, service provisioning, and OSS/BSS integration.” She went on to summarize why operators are interested: “The main driver for femtocell deployments is simply improved coverage, according to the survey results. While there is strong interest in new in-home services, extending basic voice coverage is the primary goal of femto investments.”

There are many other topics I haven’t even touched, so feel free to dig into the articles listed below:

Now playing: Chris Thile – Shipwrecked

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